Treasuries held up remarkably well under the circumstances, after a volley of outright and call selling by dealers and brokers on Jun bonds and 10s. Rate locks on several corporate deals (Wal-Mart, Wells, Target, Tenet, Northwestern) were put on and removed over the course of the session. This may have exagerated early weakness and provided some later support.
The June bond sank as low as 101-05, but perked up to close at session highs of 101-23, a deficit of only 3/32. The curve maintained its flatter bias in line with renewed economic vitality, but closed 1 basis point narrower at +229 basis points. Front-end and Euro$ rate futures contracts suffered more heavily in the early going, but later recovered. July Fed funds futures have tacked on about 16% odds of an additional quarter hike in June.